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Commission: Greece has amended unfair guarantee

Greece, Italy, Spain and Portugal have modified state guarantees on deferred tax assets created by banks following discussions with European Union regulators concerned that these may give the lenders an unfair advantage, the bloc’s state aid chief said on Tuesday.

The European Commission said the so-called deferred tax assets (DTAs) set up by the banks had started to deviate from their original goal, which meant authorities in the four countries repaid the banks for their DTAs even during their loss-making years.

“All four member-states have now changed their regimes. They have put an end to creating new state-guaranteed DTAs, which do not correspond to an anticipated payment of income taxes,” European Competition Commissioner Margrethe Vestager said in a statement.

“In addition, regarding the existing stock of state-guaranteed DTAs, all the member-states have introduced a system to adequately remunerate the state for the guarantee.”